Workbase Best Growth Strategy Award: Ryman Healthcare

Ryman Healthcare turned in stunning performance in 2011 – proving yet again the potency and consistency of its business growth strategy. Last year Ryman was finalist in the Top 200 Best Growth Strategy Award. This year it took out the winner’s trophy.
This aged-care specialist has been spectacularly successful since it was started by founders Kevin Hickman and John Ryder in 1982. It listed on the NZX in 1999. Since then its sharemarket value has increased 796 percent – clear indication that investors are now convinced the company’s business model works.
Ryman is one of New Zealand largest construction companies. The foundation of its strategy calls for the development, design, construction and operation of all the facilities it builds for the long-stay care of the elderly – rapidly expanding market.
Ryman’s success, as both media commentators and this year’s judges have pointed out, is based on the consistent application of its business model, growth in the aged care sector and board that supports the executive team in its focused implementation of the company’s ambitious growth plans. And now Ryman is dipping its toe in Australian waters.
The annual increase in the number of units built and beds provided is, as company chairman David Kerr wrote in his annual report, necessary to meet the “growing demand Ryman is experiencing”.
The company achieved its new build rate in 2011 and effectively boosted sales by 50 percent, beating its medium term target of 15 percent underlying profit growth.
The company’s growth strategy hasn’t changed since the company listed. It intends to be New Zealand’s leading provider of retirement and healthcare facilities for the elderly.
“Our approach to sustaining long-term growth is to grow our capability every year,” says Kerr.
Ryman’s approach to managing its finances is conservative to “ensure it can effectively execute” its growth plans. Consequently, the business is currently in the “strongest financial position” it has ever been.
And now the company plans to try out its winning Kiwi market strategy in Australia.
The board and executive team are both confident that Ryman village will appeal to Australia’s increasing number of elderly.
“We are acutely aware that new markets present new challenges,” Kerr wrote, assuring shareholders that Ryman will build only one new development once it secures its first parcel of land.
“We have learned great deal about the Australian market already through our research and believe in the opportunity to be very significant in the long term,” he added.
The company also focuses on the development and reward of its employees to ensure it can deliver quality product and service.
“We always attain our aged care certifications with very good results for each village,” wrote Kerr. “We actively encourage and financially reward additional training undertaken by our staff.”
New Zealand and Australia are entering prolonged period of elderly population growth. Ryman is confident that its future prospects are exciting, so long as it holds true to its strategic approach and single-minded focus on doing the things it does well. M



BEST GROWTH STRATEGY AWARD JUDGES’ COMMENTS

FINALIST
PORT OF TAURANGA
Favourable primary industry markets, particularly for dairy products and forestry, helped the Port of Tauranga cream its North Island competitors again this year. This is smart port operator that has consistently invested in its infrastructure to ensure that it is best placed to attract shipping and transport trade. The company’s commitment to strategic positioning has delivered it berth as Top 200 category finalist or winner several times over the years. The Port’s consistent strategic approach has helped it win the war against competitors and deliver excellent results.

FINALIST
SKYCITY ENTERTAINMENT GROUP
A transformative set of change strategies across the organisation have rejuvenated SkyCity’s fortunes. They look set to underpin future growth. SkyCity focused on its Auckland operations to capitalise on the business from the Rugby World Cup. Its investments in superior accommodation, new dining and other facilities are all part of strategy to widen the experience available in its Auckland casino’s inner-city precinct. The strategy looks set to deliver future shareholder rewards.

WINNER
RYMAN HEALTHCARE
Ryman Healthcare’s growth strategy is proven, consistent and it delivers outstanding results year after year. This year is no exception. Ryman’s deep understanding of the retirement and aged-care business suggests time has not wearied this successful enterprise. The company plans long term, is very clear on strategy, is highly disciplined and executes superbly. Shareholders have reaped the rewards of the company’s commitment to consistently implementing proven business model and growth strategy that leaves little to chance. The result is 25 percent compound annual profit growth over the past five years.

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